First Origin to pay $1.3b for HK Life Insurance

OCBC Wing Hang Bank has a 33.33 per cent stake in Hong Kong Life Insurance. The Hong Kong insurer, which is a joint venture of five financial institutions, sells insurance through 180 outlets using branch networks.
OCBC Wing Hang Bank has a 33.33 per cent stake in Hong Kong Life Insurance. The Hong Kong insurer, which is a joint venture of five financial institutions, sells insurance through 180 outlets using branch networks.PHOTO: OCBC

HONG KONG • Investment firm First Origin International has agreed to acquire Hong Kong Life Insurance for HK$7.1 billion (S$1.3 billion), said two of the owners of the Hong Kong insurer in the latest insurance deal in the territory.

The unlisted insurance firm's owners - consisting of OCBC Wing Hang Bank and four other financial institutions - have agreed to sell their respective equity stakes to First Origin.

OCBC Bank said its unit has a 33.33 per cent stake in the company, which will be sold for HK$2.4 billion. The purchase is in cash and the final transaction is subject to regulatory approval, OCBC said in a statement on Monday.

First Origin mainly focuses on investments in the financial and technology sectors in Asia, one of the owners, Chong Hing Bank, said in a statement to the Hong Kong stock exchange late on Monday.

Hong Kong Life Insurance is one of the last remaining independent life insurance businesses in the financial centre, and ranked 10th in terms of new business annual premium among life insurers in the city in the third quarter of 2016.

Last year, China's Thaihot Group, a relatively new entrant to Hong Kong financial circles, agreed to buy Dah Sing Financial's life insurance unit for US$1.4 billion (S$1.95 billion) in Hong Kong's most expensive insurance merger and acquisition.

In another deal that closed last year, China's JD Capital bought Ageas' Hong Kong insurance unit for US$1.4 billion, Reuters said.

Hong Kong is a developed life insurance market, with a life and health insurance premium-to- GDP ratio of 13.4 per cent in 2015, the second-highest in Asia, according to Swiss Re. Still, the market offers strong growth, with Swiss Re forecasting premiums to grow 9.2 per cent last year, making it attractive to new entrants.

The other owners of Hong Kong Life Insurance are Asia Insurance, Shanghai Commercial Bank, Chong Hing Bank and Wing Lung Bank, which own about 16.7 per cent each in the company.

Hong Kong Life sells insurance through 180 outlets using branch networks. The statement on Monday said the banks would enter into a product distribution agreement with the new owner of Hong Kong Life after the closure of the transaction, which is subject to regulatory approvals.

A version of this article appeared in the print edition of The Straits Times on March 22, 2017, with the headline 'First Origin to pay $1.3b for HK Life Insurance'. Print Edition | Subscribe